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Finance Bill


Finance Bill
Schedule 38 — Stamp duty land tax: claims not included in returns

544

 

Penalty for failure to produce documents etc

10    (1)  

A person who fails to comply with a notice under paragraph 8

(notice to produce documents etc for purposes of enquiry) is

liable—

(a)   

to a penalty of £50, and

5

(b)   

if the failure continues after a penalty is imposed under

paragraph (a), to a further penalty or penalties not

exceeding £30 for each day on which the failure continues.

      (2)  

No penalty shall be imposed under this paragraph in respect of a

failure at any time after the failure has been remedied.

10

Completion of enquiry

11    (1)  

An enquiry under paragraph 7 is completed when the Inland

Revenue by notice (a “closure notice”) inform the purchaser that

they have completed their enquiries and state their conclusions.

      (2)  

A closure notice must either—

15

(a)   

state that in the opinion of the Inland Revenue no

amendment of the claim is required, or

(b)   

if in the Inland Revenue’s opinion the claim is insufficient

or excessive, amend the claim so as to make good or

eliminate the deficiency or excess.

20

           

In the case of an enquiry into an amendment of a claim, paragraph

(b) applies only so far as the deficiency or excess is attributable to

the amendment.

      (3)  

A closure notice takes effect when it is issued.

Direction to complete enquiry

25

12    (1)  

The claimant may apply to the General or Special Commissioners

for a direction that the Inland Revenue give a closure notice within

a specified period.

      (2)  

Any such application shall be heard and determined in the same

way as an appeal.

30

      (3)  

The Commissioners hearing the application shall give a direction

unless they are satisfied that the Inland Revenue have reasonable

grounds for not giving a closure notice within a specified period.

Giving effect to amendments under paragraph 11

13    (1)  

Within 30 days after the date of issue of a notice under paragraph

35

11(2)(b) (closure notice that amends claim), the Inland Revenue

shall give effect to the amendment by making such adjustment as

may be necessary, whether—

(a)   

by way of assessment on the claimant, or

(b)   

by discharge or repayment of tax.

40

      (2)  

An assessment made under sub-paragraph (1) is not out of time if

it is made within the time mentioned in that sub-paragraph.

 

 

Finance Bill
Schedule 39 — Stamp duty land tax: application to certain partnership transactions

545

 

Appeals against amendments under paragraph 11

14    (1)  

An appeal may be brought against a conclusion stated or

amendment made by a closure notice.

      (2)  

Notice of the appeal must be given—

(a)   

in writing,

5

(b)   

within 30 days after the date on which the closure notice

was issued,

(c)   

to the officer of the Board by whom the closure notice was

given.

      (3)  

The notice of appeal must specify the grounds of appeal.

10

      (4)  

On the hearing of the appeal the Commissioners may allow the

appellant to put forward grounds not specified in the notice, and

take them into consideration, if satisfied that the omission was not

deliberate or unreasonable.

      (5)  

Paragraph 37 of Schedule 10 (settling of appeals by agreement)

15

applies in relation to an appeal under this paragraph as it applies

in relation to an appeal under paragraph 35 of that Schedule.

      (6)  

On an appeal against an amendment made by a closure notice, the

Commissioners may vary the amendment appealed against

whether or not the variation is to the advantage of the appellant.

20

      (7)  

Where any such amendment is varied, whether by the

Commissioners or by the order of a court, paragraph 13 (giving

effect to amendments under paragraph 11) applies (with the

necessary modifications) in relation to the variation as it applied

in relation to the amendment.

25

Jurisdiction of Commissioners

15    (1)  

An appeal against a conclusion stated or amendment made by a

closure notice is to be made to the Special Commissioners if it

relates to a claim made to the Board.

      (2)  

Subject to—

30

(a)   

sub-paragraph (1),

(b)   

paragraph 33(4) of Schedule 10 (appeal against decision on

claim for relief in case of double assessment), and

(c)   

any right to elect to bring an appeal before the Special

Commissioners conferred by regulations under Schedule

35

17 (General and Special Commissioners, appeals and other

proceedings),

           

an appeal under any provision of this Schedule is to be made to the

General Commissioners.”

Schedule 39

40

Section 288

 

Stamp duty land tax: application to certain partnership transactions

1          

In Schedule 15 to the Finance Act 2003 (c. 14) (stamp duty land tax:

partnerships), for Part 3 (transactions excluded from stamp duty land tax)

 

 

Finance Bill
Schedule 39 — Stamp duty land tax: application to certain partnership transactions

546

 

substitute—

“Part 3

Transactions to which special provisions apply

Introduction

9     (1)  

This Part of this Schedule applies to certain transactions

5

involving—

(a)   

the transfer of an interest in land to a partnership

(paragraph 10),

(b)   

the transfer of an interest in a partnership (paragraphs 12,

15, 23 and 24), or

10

(c)   

the transfer of an interest in land from a partnership

(paragraph 16).

      (2)  

References in this Part of this Schedule to the transfer of an interest

in land include—

(a)   

the grant or creation of an interest in land,

15

(b)   

the variation of an interest in land, and

(c)   

the surrender, release or renunciation of an interest in land.

Transfer of interest in land to a partnership: general

10    (1)  

This paragraph applies where—

(a)   

a partner transfers an interest in land to the partnership, or

20

(b)   

a person transfers an interest in land to a partnership in

return for an interest in the partnership, or

(c)   

a person connected with—

(i)   

a partner, or

(ii)   

a person who becomes a partner as a result of or in

25

connection with the transfer,

   

transfers an interest in land to the partnership.

           

It applies whether the transfer is in connection with the formation

of the partnership or is a transfer to an existing partnership.

      (2)  

The chargeable consideration for the transaction shall be taken to

30

be equal to a proportion of the market value of the interest

transferred.

      (3)  

That proportion is the total of the other partners’ partnership

shares immediately after the transfer.

      (4)  

Paragraph 11 applies (instead of sub-paragraphs (2) and (3)) if the

35

whole or part of the chargeable consideration for the transaction is

rent.

      (5)  

Paragraphs 6 to 8 (responsibility of partners) have effect in relation

to a transaction to which this paragraph applies, but the

responsible partners are—

40

(a)   

those who were partners immediately before the transfer

and who remain partners after the transfer, and

(b)   

any person becoming a partner as a result of, or in

connection with, the transfer.

 

 

Finance Bill
Schedule 39 — Stamp duty land tax: application to certain partnership transactions

547

 

Transfer of interest in land to a partnership: chargeable consideration including rent

11    (1)  

This paragraph applies in relation to a transaction to which

paragraph 10 applies where the whole or part of the chargeable

consideration for the transaction is rent.

      (2)  

Schedule 5 provides for the calculation of the tax chargeable in

5

respect of the transaction, subject to the following provisions of

this paragraph.

      (3)  

Paragraph 2 of Schedule 5 (calculation of tax chargeable in respect

of rent) has effect as if—

(a)   

for “the net present value of the rent payable over the term

10

of the lease” there were substituted “the chargeable

proportion of the net present value of the rent payable over

the term of the lease”, and

(b)   

for “the net present values of the rent payable over the

terms of all the leases” there were substituted “the

15

chargeable proportions of the net present values of the rent

payable over the terms of all the leases”.

      (4)  

If there is chargeable consideration other than rent, that

chargeable consideration shall be taken to be equal to the

chargeable proportion of the market value of the interest

20

transferred.

      (5)  

If there is no chargeable consideration other than rent—

(a)   

there shall (despite that) be taken to be chargeable

consideration other than rent (in particular for the

purposes of paragraph 9 of Schedule 5), and

25

(b)   

that chargeable consideration shall be taken to be equal to

the chargeable proportion of the market value of the

interest transferred.

      (6)  

The chargeable proportion is the total of the other partners’

partnership shares immediately after the transfer.

30

Transfer of partnership interest: consideration given and interest in land held

12    (1)  

A transfer of an interest in a partnership is a chargeable

transaction if—

(a)   

consideration is given for the transfer, and

(b)   

the relevant partnership property includes an interest in

35

land.

           

The purchaser under the transaction is the person who acquires an

increased partnership share or, as the case may be, becomes a

partner in consequence of the transfer.

      (2)  

Consideration is regarded as given for the transfer—

40

(a)   

in a case within paragraph 27(a), if consideration in money

or money’s worth is given by or on behalf of the person

acquiring the interest;

(b)   

in a case within paragraph 27(b), if there is a withdrawal of

money or money’s worth from the partnership by the

45

person reducing his interest or ceasing to be a partner.

 

 

Finance Bill
Schedule 39 — Stamp duty land tax: application to certain partnership transactions

548

 

      (3)  

The “relevant partnership property”, in relation to a transfer of an

interest in a partnership, is every interest in land held as

partnership property immediately after the transfer, other than—

(a)   

any interest that was transferred to the partnership in

connection with the transfer;

5

(b)   

a lease to which paragraph 13 (exclusion of market rent

leases) applies.

      (4)  

The chargeable consideration for the transaction shall be taken to

be equal to a proportion of the market value of the relevant

partnership property.

10

      (5)  

That proportion is—

(a)   

if the person acquiring the interest in the partnership was

not a partner before the transfer, his partnership share

immediately after the transfer;

(b)   

if he was a partner before the transfer, the difference

15

between his partnership share before and after the transfer.

Exclusion of market rent leases

13    (1)  

A lease held as partnership property immediately after a transfer

of an interest in the partnership is not relevant partnership

property for the purposes of paragraph 12(3) if the following three

20

conditions are met.

      (2)  

The first condition is that—

(a)   

no consideration other than rent has been given in respect

of the grant of the lease, and

(b)   

no arrangements are in place at the time of the transfer for

25

any consideration other than rent to be given in respect of

the grant of the lease.

      (3)  

The second condition is that the rent payable under the lease as

granted was a market rent at the time of the grant.

      (4)  

The third condition is that—

30

(a)   

the lease provides for the rent payable under it to be

reviewed;

(b)   

the first review date is not more than 5 years after the date

on which the term of the lease begins;

(c)   

if there is more than one review date under the lease, the

35

interval between any two of them is not more than 5 years;

(d)   

the rent payable under the lease as a result of a review is

required to be the market rent at the review date (or, if

higher, the rent payable under the lease immediately

before the review date).

40

      (5)  

The market rent of a lease at any time is the rent which the lease

might reasonably be expected to fetch at that time in the open

market.

      (6)  

A review date is a date from which the rent determined as a result

of a rent review is payable.

45

 

 

Finance Bill
Schedule 39 — Stamp duty land tax: application to certain partnership transactions

549

 

Partnership interests: application of provisions about exchanges etc.

14    (1)  

Where paragraph 5 of Schedule 4 (exchanges) applies to the

acquisition of an interest in a partnership in consideration of

entering into a land transaction with an existing partner, the

interest in the partnership shall be treated as a major interest in

5

land for the purposes of that paragraph if the relevant partnership

property includes a major interest in land.

      (2)  

In sub-paragraph (1) “relevant partnership property” has the

meaning given by paragraph 12(3).

      (3)  

The provisions of paragraph 6 of Schedule 4 (partition etc:

10

disregard of existing interest) do not apply where this paragraph

applies.

Transfer of partnership interest pursuant to earlier arrangements

15    (1)  

This paragraph applies where—

(a)   

there is a transfer of an interest in land to a partnership

15

(“the land transfer”);

(b)   

the land transfer falls within paragraph (a), (b) or (c) of

paragraph 10(1);

(c)   

there is subsequently a transfer of an interest in the

partnership (“the partnership transfer”);

20

(d)   

the partnership transfer is made—

(i)   

if the land transfer falls within paragraph 10(1)(a)

or (b), by the person who makes the land transfer;

(ii)   

if the land transfer falls within paragraph 10(1)(c),

by the partner concerned;

25

(e)   

the partnership transfer is made pursuant to arrangements

that were in place at the time of the land transfer;

(f)   

the partnership transfer is not (apart from this paragraph)

a chargeable transaction.

      (2)  

The partnership transfer is a chargeable transaction.

30

      (3)  

The partners shall be taken to be the purchasers under the

transaction.

      (4)  

The chargeable consideration for the transaction shall be taken to

be equal to a proportion of the market value, as at the date of the

transaction, of the interest transferred by the land transfer.

35

      (5)  

That proportion is—

(a)   

if the person making the partnership transfer is not a

partner immediately after the transfer, his partnership

share immediately before the transfer;

(b)   

if he is a partner immediately after the transfer, the

40

difference between his partnership share before and after

the transfer.

      (6)  

The partnership transfer and the land transfer shall be taken to be

linked transactions.

      (7)  

Paragraphs 6 to 8 (responsibility of partners) have effect in relation

45

to the partnership transfer, but the responsible partners are—

 

 

Finance Bill
Schedule 39 — Stamp duty land tax: application to certain partnership transactions

550

 

(a)   

those who were partners immediately before the transfer

and who remain partners after the transfer, and

(b)   

any person becoming a partner as a result of, or in

connection with, the transfer.

Transfer of interest in land from a partnership: general

5

16    (1)  

This paragraph applies where an interest in land is transferred—

(a)   

from a partnership to a person who is or has been one of

the partners, or

(b)   

from a partnership to a person connected with a person

who is or has been one of the partners.

10

      (2)  

There is a transfer of an interest in land from a partnership in any

case where—

(a)   

an interest in land that was partnership property ceases to

be partnership property, or

(b)   

an interest in land is granted or created out of partnership

15

property and the interest is not partnership property.

      (3)  

The chargeable consideration for the transaction shall be taken to

be equal to the chargeable proportion of the market value of the

interest transferred.

           

Paragraph 18 provides for determining the chargeable proportion.

20

      (4)  

Paragraph 17 applies (instead of sub-paragraph (3)) if the whole or

part of the chargeable consideration for the transaction is rent.

      (5)  

For the purposes of this paragraph property that was partnership

property before the partnership was dissolved or otherwise

ceased to exist shall be treated as remaining partnership property

25

until it is distributed.

Transfer of interest in land from a partnership: chargeable consideration including

rent

17    (1)  

This paragraph applies in relation to a transaction to which

paragraph 16 applies where the whole or part of the chargeable

30

consideration for the transaction is rent.

      (2)  

Schedule 5 provides for the calculation of the tax chargeable in

respect of the transaction, subject to the following provisions of

this paragraph.

      (3)  

Paragraph 2 of Schedule 5 (calculation of tax chargeable in respect

35

of rent) has effect as if—

(a)   

for “the net present value of the rent payable over the term

of the lease” there were substituted “the chargeable

proportion of the net present value of the rent payable over

the term of the lease”, and

40

(b)   

for “the net present values of the rent payable over the

terms of all the leases” there were substituted “the

chargeable proportions of the net present values of the rent

payable over the terms of all the leases”.

      (4)  

If there is chargeable consideration other than rent, that

45

chargeable consideration shall be taken to be equal to the

 

 

 
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